A charity set up by the Queen’s grandson Peter Phillips was deemed a “high risk case” by regulators after it awarded the lucrative contract for arranging the Queen's 90th birthday party to his own for-profit company, documents obtained by BuzzFeed News reveal.
The Charity Commission raised concerns that Peter Phillips was in line for a “personal benefit” after the Patron’s Fund appointed his firm SEL UK to arrange a massive street party outside Buckingham Palace in July which is expected to generate £4 million.
Internal documents show the regulator challenged Phillips over the potential conflict of interest and was assured his company had been appointed at “arm’s length” by his two fellow trustees because of the “unique combination” of his royal contacts and ability to handle the arrangements with the “necessary discretion”.
The fund was granted charitable status but given a “red” risk rating, which the commission applies in cases when “concerns arise during the registration process that we need to keep a watchful eye on a charity’s governance and management”.
Phillips, the 38-year-old son of Princess Anne, came up with the idea of a birthday party on The Mall to raise money for the 600 charities supported by the Queen, and sought approval from the palace before founding the Patron’s Fund to oversee the event.
BuzzFeed News revealed in February that he had stepped down as a trustee after the fund awarded his company the event management contract for a fixed fee. SEL UK has already faced criticism for charging the 10,000 guests £150 a head for places at the not-for-profit picnic, which will be attended by the royal family.
Phillips refused to disclose how much money SEL UK would make from organising the party and his spokesperson insisted the Charity Commission had found “no reason” why the firm should not be given the contract.
However, documents obtained under freedom of information laws have now revealed the red risk rating given to the charity, because of its connection to the Queen’s birthday, its projected “high income”, and the fact that the contract had been given to Phillips’s firm.
The total income from The Patron's Lunch is expected to be around £4 million, which will cover the event's costs and SEL UK's undisclosed management fee before the profits are passed to the Patron's Fund to be disbursed between the Queen's 600 charities, ranging from Cancer Research UK to the Dogs Trust.
Charity Commission officials questioned Phillips on the phone about the involvement of SEL UK last October and sought written assurances from the trustees about the potential conflict of interest.
The fund’s lawyers wrote to the regulator insisting that the decision to give the job to SEL UK had been approved independently by the other two trustees, Sir Anthony Wreford and Sir Stuart Hetherington. The firm had been appointed because of its “contacts both within and outside of The Royal Household and The Palace and its ability to manage the logistics relating to the Charity’s proposed event with the necessary discretion”, the email said, as well as its experience in organising high-profile events.
The Charity Commission noted in its internal database that the trustees had “independently decided” to appoint SEL UK, and acknowledged that Phillips “has a wealth of experience in event management (of a large scale) and is well positioned to liaise with Royal household”. The personal benefit was therefore deemed “acceptable” and the fund was granted charitable status, but its risk rating was confirmed as red. The Charity Commission said the fund was being monitored under the terms of the regulator's Risk Framework.
The fund again refused to confirm how much SEL UK would be paid to run the event when contacted by BuzzFeed News this week. It said in a statement that Phillips had approached the palace and gained approval to run the event after an "internal process", and said "this was always done in the knowledge that SEL would charge a management fee and that all profits from the Event would be passed to a charitable trust which in turn would then be dispersed back to the charities to which The Queen acts as Patron".
After Phillips set up the fund, the statement said, both the independent trustees and the Charity Commission "noted Mr Phillips’s interest and found no reason as to why this would preclude SEL from organising the Event that they had conceived and would not exist without them".
It continued: "It was however, always Mr. Phillips’ intention to step down as a trustee
once The Patron’s Fund was fully operational to ensure that there was no
perceived conflict of interest and to ensure the integrity of the event and the
charity were maintained."
Asked whether other companies had been invited to bid for the contract, a spokesman for the charity said previously: “There would be no Patron’s Lunch or Fund had [Phillips] not come up with the idea and taken it to get approved by the Palace in the way he did.”
The Patron's Lunch will be the biggest street party ever held on the Mall. It is billed as the “celebratory finale” to a weekend of royal celebrations for the Queen's birthday that will include a thanksgiving service at St Paul’s Cathedral and the pomp of a full military parade in front of Buckingham Palace.
Phillips has previously spoken of his “huge amount of pride” at organising the national event in honour of his grandmother.
Sir Stuart Etherington, the Patron's Fund chair of trustees, told BuzzFeed News: "I take very seriously the not-for-profit nature of the event and I am comfortable that the set-up and structure will ensure that this is the case. I have put in place a strong board of trustees who will be responsible for ensuring that this event achieves all the things it set out to do.
"The surplus that is made after event costs are paid will be put into The Patron’s Fund. A disbursement committee with a range of external charity experts will determine how this will be distributed in support of The Queen’s charities within the UK and across the Commonwealth. The details of the Patron’s Fund’s income and grants will be published in full in its annual report."